California Supply Chains Act

California Transparency in Supply Chains Act Disclosures

In January 2012, California enacted the California Transparency in Supply Chains Act of 2010 (the “Act”), requiring companies of a certain size to publicly disclose the steps they are taking to identify and eradicate human trafficking and forced labor in their supply chains. We expect ourselves as a company and our suppliers to operate ethically and to comply with all applicable laws and regulations. To that end, in accordance with the Act, we make the following disclosures:

Verification

We select suppliers who support our values and expect them to comply with all applicable laws and regulations. We do not currently verify our product supply chain specifically to evaluate risks of human trafficking and slavery. Nonetheless, we are committed to evaluating measures to assess our supply chain for areas of improvement in eradicating slavery and human trafficking.

Audits

If we were to receive a complaint with allegations of any of our direct suppliers engaging in human trafficking, we would thoroughly investigate any such allegations of human trafficking and timely address whatever facts are discovered. To date, our company has not received any such complaints. We do not currently conduct audits of our suppliers related to trafficking or human slavery in supply chains. Nonetheless, we are working towards incorporating language in our standard terms and conditions with our direct suppliers that would reserve our discretion to conduct such audits in the event we form a reasonable suspicion that a supplier is violating human trafficking and slavery standards.

Certification

We require our suppliers to comply with all local, state, federal, and international laws or regulations that apply to their business activities. We do not currently require our direct suppliers to certify that they comply with anti-slavery and human trafficking laws in the country or countries in which they do business. We are in the process of amending our standard terms and conditions with our direct suppliers, however, to reserve our discretion to seek a written certification of compliance from them, in the event we form a reasonable suspicion that a supplier may be violating human trafficking or slavery standards. If the use of human trafficking or slavery is identified in Advanced Fabrics’ supply chain, it should be reported immediately to Jim Gibson, General Counsel, at (843) 202-6224.

Internal Accountability

We are committed to complying with the law wherever we operate and conducting all business activities in accordance with the highest ethical standards. We expect the same of the parties with which we do business. Human trafficking and slavery are illegal, and conflict with the standards we expect of our employees and suppliers. If we were to discover evidence of such conduct being committed by our employees or suppliers, our company will take appropriate measures to address such actions, up to and including termination of the employment or contractual relationship with our company.

Training

We demand that our managers, employees, and agents conduct themselves with integrity and professionalism. Our company has a Code of Business Conduct and Ethics that applies to all of our employees. At the present time, the Code does not include any standards specific to human trafficking and slavery, and we do not provide training specific to such standards. However, the Code does require compliance with the laws, rules, and regulations of every country in which Advanced Fabrics does business, which would include laws on human trafficking and slave labor.